Unilever Expected to Pare Sales Growth Goal

News, 09 February 2004

Food and fmcg giant Unilever, the globe's second largest advertiser in 2002 (after Procter & Gamble), is predicted to lower its much-vaunted sales growth targets later this week.

The Anglo-Dutch group, due to report its 2003 results on Thursday, is also expected to announce a revamped commercial game plan. In a strategy dubbed Path to Growth, Unilever had hitherto aimed to reach annual key brand sales growth of between 5% and 6% by the end of 2004.

Despite early success with this blueprint, the group recently conceded that 2003 results will fall well below target -- due in part to the devastating impact of the Atkins Diet on its SlimFast brand range. Other of its businesses -- fragrances, household cleaners and frozen foods -- have also reportedly performed below par.

Having been forced last year to cut sales forecasts twice within four months, analysts now expect Unilever's new strategy to lower the hurdle for top-line revenue growth.

One haruspex, J P Morgan's Arnaud Langlois, forecasts a more modest sales growth target of between 4% and 6%. Another, Julian Hardwick of ABN Amro, sets expectations even lower, suggesting a target of between 3% and 6%. "Given the environment we are operating in now ... they will broaden the range significantly," he predicts.

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